March 24, 2025/CSL Research
The Central Bank of Nigeria (CBN) recently released the Business Expectation Survey (BES) for February 2025, covering three key sectors: Industry, Services, and Agriculture. The survey suggests an overall optimistic outlook for the macroeconomy, with a confidence index of 19.7 points in February 2025. Into the near future, business confidence is expected to strengthen further. The confidence index is anticipated at 25.0 points for March 2025, rising to 37.7 points in May 2025, and reaching 42.5 points by August 2025.
These indices reflect businesses’ expectations regarding changes in various aspects of their operations in the coming months. A confidence index above 0.0 signifies positive sentiment towards business activities, while an index below 0.0 indicates a negative outlook. The survey revealed that all sectors maintained a positive near-term outlook for business activities in February 2025, with the industrial sector expressing the highest level of optimism.
Respondent firms also anticipated an appreciation of the Naira, albeit with slightly less confidence than in the previous month. We attribute this to a combination of factors: the positive impact of the Central Bank of Nigeria’s (CBN) initiatives to enhance transparency and stability in the foreign exchange market, as well as recent pressures on domestic reserves caused by foreign portfolio investment (FPI) outflows, which briefly led to a depreciation of
the Naira.
Similarly, businesses across all sectors remain optimistic about employment growth and expansion, with the construction sector recording the highest capacity utilization in February 2025. The sector also showed the strongest prospects for job creation in March 2025.
However, respondents identified several key business constraints for the month, including high interest rates, insecurity, and insufficient power supply. Other significant challenges cited were high taxes, financial difficulties, and excessive bank charges.
Recent economic data suggests growing business confidence, as reflected in the latest Purchasing Manager’s Index (PMI) from the CBN, which stood at 51.4 points in February 2025, indicating increased output across sectors. While this signals economic recovery, persistent challenges—such as insecurity, high interest rates, multiple taxes, and inadequate power supply—pose significant risks. If not effectively addressed, these issues could hinder the achievement of targeted economic growth in the medium term.
Click here to download full report: CSL Nigeria Daily – 24 March 2025 – Economy.pdf
